Investor's Business Daily's William O'Neal, says that after the market rallies off a bottom you need to look for a very strong up day (1.25% gain in one of the major market indexes on bigger volume) to confirm that the rally potentially has legs. This strong rally day should occur at least 4 days after the bottom was put in. He calls this a Follow Through Day. We had our FTD today.
My TradeStation FTD indicator picks this up.
NASDAQ COMPOSITE INDEX
"Not all Follow Through Days result in a successful rally, but, all successful rallies begin with a Follow Through Day."
The market brushed off the concerns of day and forged ahead to a new high today. I added to positions today and will continue to add positions as the market progresses. It is so much more comfortable investing with the wind at your back.